Powered by MOMENTUM MEDIA
subscribe to our newsletter sign up

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Critical dates confirmed for Labor’s tax changes

Chris Bowen

The federal opposition has confirmed its start dates for its proposed changes to negative gearing and capital gains tax.

What are the proposals?

If elected, the Labor Party will limit negative gearing to new housing from 1 January 2020.

Further, the Labor Party plans to halve the capital gains discount for all assets purchased after the same date. In effect, this will reduce the capital gains tax discount for assets that are held longer than 12 months from 50 per cent to 25 per cent.

Advertisement
Advertisement

On both measures, all changes will be grandfathered, which means they won’t apply retrospectively.

Much-needed clarity

The announcement will bring greater certainty to investors who were waiting on Labor to provide more details around its proposal.

The Parliamentary Budget Office has costed the two measures to raise $2.9 billion over the forward estimates period to 2022-23, and $35.1 billion over the next decade.

Mr Bowen also announced that Labor will revamp the build-to-rent scheme, giving institutional investors a tax concession to encourage the building of new rental properties.

If elected, the opposition will cut the managed investment trust withholding rate in half, from 30 per cent to 15 per cent, on tax distributions attributable to investments in build-to-rent housing.

“Federal Labor’s reforms to negative gearing enjoy the support of many independent economists and think tanks like the Grattan Institute and Saul Eslake as well as international economic agencies like the International Monetary Fund,” said Mr Bowen.

“The fact is, the benefits of both negative gearing and the capital gains tax discount are skewed towards the wealthy, with the Grattan Institute estimating almost 70 per cent of the benefit of the CGT discount accrues to the top 10 per cent of income earners.” 

 

Critical dates confirmed for Labor’s tax changes
Chris Bowen
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Anonymous - This is all identity politics rubbish. Inasmuch as most families are dual income earners and as most women are not in high paying jobs for a variety.......
Margaret - Happy that I won't be around in 2060....
Anonymous - This "analysis" is misconceived and should get a fail in statistics. Men pay more tax because they work more. So they should get more relief. And,.......
Anonymous - I'm not sure how the ATO can declare there is an "$8.7 Billion hole" without already being able to confirm that all these claims are illegitimate?

Is.......